EghtesadOnline: Iran is pursuing plans to connect its power grid with European electrical systems, and Armenia, a nation of about 3 million people northwest of Iran, is seen as playing a key role in the linkup.

“By setting up a regional electricity grid and boosting current power exchanges, Iran can connect its network with Georgia, Turkey, Slovenia and other European states through Armenia,” Alireza Daemi, deputy energy minister for planning and economic affairs, was quoted as saying by IRNA on Wednesday.

To the south, Armenia shares borders with Iran. To the west and the north, it is surrounded by Turkey and Georgia, two countries lying at the intersection of Asia and Europe.

Armenia is connected to Iran through two electricity lines and a third is under construction. According to reports, the new power line, to be completed by the end of 2018 at an estimated cost of $107 million, is part of an agreement between Iran, Russia, Armenia and Georgia to synchronize their power grids by 2019, paving the way for electricity exchange between Tehran and Moscow as part of their cooperation plans, Financial Tribune reported.

Daemi added that Iranian companies are due to build one of the power lines in Armenia, which will reach Georgia.

On the Energy Ministry’s measures to increase electric exchanges with Turkmenistan, Daemi said bilateral power trade is being carried out through two 230-kV lines, which are being upgraded to 400-kV power lines to minimize low voltage and wastage. Iranian officials say power wastage in Iran's national grid has witnessed a 4.5% reduction, receding from 15% to 10.68% in the last four years.

According to Daemi, Iran has power trade with Armenia, Azerbaijan, Turkmenistan and Nakhchivan, and exports electricity to Turkey, Iraq, Pakistan and Afghanistan.

With an installed power production capacity of 77,000 MW, Iran meets almost 80% of its electricity demand from aging thermal plants. It is reported that steps have been taken to gradually convert the conventional plants into efficient combined-cycle units.

Close to 12,000 MW are produced from hydroelectric plants and 1,000 MW from the sole nuclear power plant in Bushehr in the south.